Turkey’s earthquakes paralyze third of steel output capacity

Large steel mills in southern Turkey are expected to remain shut for weeks, with production lines idle and workers trying to cope with the impact of the massive twin earthquakes that shook the region.

About a dozen facilities in Iskenderun and Osmaniye — close to the epicenter of the Feb. 6 temblors — account for a third of national steel output, according to Veysel Yayan, secretary-general of the Turkish Steel Producers Association. 

Although plants in the area suffered no physical damage, many workers or their family members had died, while survivors struggle to get by in makeshift conditions, he  said. 

“All steelmakers in the area are closed,” he said by phone on Monday. “The plants may remain shut at least until the end of this month, or possibly until mid-March.”

Turkey is a top 10 global producer and exporter of steel, and the industry is among the first to provide an assessment of the toll from the deadliest temblors to hit the country in almost a century. 

Although their impact on regional activity isn’t yet fully clear, Bloomberg Economics has estimated that addressing the aftermath may require the equivalent of 5.5% of gross domestic product in public spending.

A business group has put the economic cost of the earthquakes at over $84 billion — including damage to buildings and loss in national income. Declines in the labor force would cost another $2.9 billion, the Turkish Enterprise and Business Confederation said in a Feb. 10 report. 

‘Need Calibrating’

The steel mills are facing another disruption after having to dispatch machinery and equipment to help out the rescue effort. “Cranes and some other key equipment will need calibrating” after the work ends, Yayan said.

Iskenderun Demir ve Celik AS, a unit of Turkey’s biggest steel group Erdemir, Tosyali Group’s Toscelik, Tosyali Demir Celik AS and Tosyali Toyo Celik AS, a joint venture with Japan’s Toyo Kohan Co. Ltd., MMK Metalurji, a unit of Russian Magnitogorsk Iron and Steel Works, are among companies that operate in the region. 

Steelmakers elsewhere in Turkey will have to prioritize domestic demand over exports, according to Yayan. The country’s annual steel production capacity, at 55 million tons a year, is more than sufficient to cover local demand, he said.